6.4% and 5.7% yields! 2 top dividend shares I’d buy before the end of 2023

I think these dividend shares are top buys for long-term passive income. Here’s why I’ll be looking to buy them when I next have cash to invest.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

A young black man makes the symbol of a peace sign with two fingers

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

I think these UK dividend shares could help investors build a winning portfolio for the next decade.


Investor interest in buy-to-let has faded in recent years. Increasing tax liabilities, rising running costs, and ballooning red tape is causing an exodus of private landlords.

But this doesn’t mean residential property is a bad place to invest. Investors can still make good returns from the sector if they put their money in the right place.

I think The PRS REIT (LSE:PRSR) is a great way for people seeking passive income to play the property market.

Just like buy-to-let investors, the company receives a steady stream of rental income that allows it to pay bulky dividends. However, due to its increased scale — it has more than 5,000 properties on its books — it’s able to run its properties much more cost effectively than individual investors are.

What’s more, its huge homes portfolio helps reduce the risk of operational problems (like missed rent payments) at some of its properties on group earnings.

Grainger is another listed residential landlord whose stock I can buy today. But PRS has one characteristic that can make it a better investment for dividend chasers. As a real estate investment trust (or REIT), it must pay at least 90% of annual rental earnings out in the form of dividends.

Rents in the UK have ballooned in recent years. Industry experts expect tenant costs to continue to soar too as the market’s supply and demand imbalance grows. In fact estate agent Hamptons has predicted that rents that rents “will rise 25% over the next four years.”

I think PRS — which offers a giant 5.7% forward dividend yield — is a great stock to buy to capitalise on this opportunity. That’s even though build cost inflation could remain above normal levels for some time.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

Greencoat UK Wind

Green energy producers like Greencoat UK Wind (LSE:UKW) have an opportunity to grow earnings (and dividends) strongly as the transition from fossil fuels heats up.

In the UK, the government aims to have onshore and offshore wind turbines generating 50GW of power by 2030. That’s up from around 14GW at present, meaning dozens more wind farms will have to be built to meet this target.

Companies like Greencoat UK Wind will play a vital role in this journey. And investors could make decent cash along the way. The firm is committed to growing its portfolio (which currently comprises 40+ assets) in Britain.

That’s not to say there won’t be hiccups along the way. Profits at renewable energy stocks can sink when the wind fails to blow. And this can cause turbulence in an operator’s share price. It can also have major implications for dividends.

But this doesn’t put me off as I invest for the long term. And I believe that the potential benefits of owning Greencoat shares outweigh any temporary troubles that power generation problems may cause. I think the company (whose dividend yield sits at a juicy 6.4% for this year) is a top buy following recent price weakness.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Greencoat Uk Wind Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Black father holding daughter in a field of cows
Investing Articles

A FTSE 100 share that could create generational wealth

Investing in FTSE shares can help individuals pass down a significant chunk of cash to their children and grandchildren, data…

Read more »

Investing Articles

Here’s what the BT share price could mean for passive income investors

The BT share price has been falling for years, but that might be about to change. And dividends could be…

Read more »

Investing Articles

At £4.76, is the Aviva share price a steal? Here’s what the charts say!

Aviva has outperformed the Footsie over the last year. But is there still value in its share price? This Fool…

Read more »

Photo of a man going through financial problems
Investing Articles

Does a 43% price drop make this undervalued UK stalwart one of the best cheap shares to buy now?

After losing a third of its value of the past five years, this might be one of the most undervalued…

Read more »

Businessman use electronic pen writing rising colorful graph from 2023 to 2024 year of business planning and stock investment growth concept.
Investing Articles

My top 3 picks today for a £20,000 Stocks and Shares ISA

Here are three very different investments to consider for a Stocks and Shares ISA, covering both the UK and US…

Read more »

Businesswoman calculating finances in an office
Investing Articles

The Darktrace share price has been surging — and it could climb higher

I think the Darktrace share price could have more room to run. Despite the competitive AI industry, the firm looks…

Read more »

Young Black man sat in front of laptop while wearing headphones
Investing Articles

With its 7% dividend, should I be watching the Aviva share price?

Dividend investors will struggle to find many companies with a yield above 7%, so should the Aviva share price be…

Read more »

Investing Articles

Could this be one of the FTSE 100’s best cheap dividend shares?

Looking for the best dividend growth shares to buy? Our writer Royston Wild thinks this FTSE 100 housebuilder might well…

Read more »